Friday, October 21, 2016

DBRS back to comment on the credit rating attributed to Portugal – the Public.en

THE DBRS back in this Friday to speak about the rating assigned to Portugal, and the maintenance of the note of investment is crucial for the country to continue to be included in the program of purchase of assets of the ECB.

In the last analysis to the Portuguese economy, in April, the agency credit ratings maintained a stable outlook to the rating, which gives the indication that Portugal should remain with a note of 'BBB' (the'low'), the first level of investment, above the 'junk'.

Still, the DBRS has been shown to be concerned with the weak growth of the Portuguese economy, getting to admit, in August, the growth below the expected Gross Domestic Product (GDP) in the second quarter increased the pressure on the rating assigned to Portugal.

At the time, and in statements to the Lusa agency, the dirextor of department of the analysis of ratings sovereign of the DBRS, Fergus McComirck, also has been concerned with the impact of the recapitalisation of Caixa Geral de Depósitos (CGD) in the public accounts.

Still, analyst with DBRS stressed at the time that the perspective of the rating assigned to the Portuguese debt continues to be stable.

More recently, at the end of September, Fergus McComirck, in an interview to the information agency Bloomberg financial, kept the concerns in the face of economic growth and high interest debt, highlighting, on the other hand, the political stability in Portugal.

"There are two negatives and a positive," he summed up.

In the analysis of the Portuguese economy, DBRS will take into account the economic and fiscal outlook of the Government for this year and next, being that the executive has worsened their estimates in the face of the shown in the Stability Programme, submitted in April.

At the time, the Government estimated an economic growth of 1.8% in 2016 and 2017, and a budget deficit of 2.2% of GDP this year and 1.4% next.

In the proposed State Budget for 2017 (OE2017), the Government expects the economy to grow by 1.2% this year and 1.5% next, and that the budget deficit represents 2.4% of GDP in 2016 and 1.6% in 2017.

THE DBRS is the only agency to assign a note investment to the Portuguese public debt, while the remaining three largest entities of rating (Moody s, Standard & Poor’s and Fitch) consider that Portugal is still in a degree of garbage.

The rating assigned by DBRS is relevant because the rating of investment by at least one of the largest agencies of rating is required so that the European Central Bank (ECB) continue to buy public debt in Portugal and the finance banking national.


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